The protection gap is not going to be closed by having one more conversation at the point a mortgage is arranged.
The FCA’s latest pure protection study makes clear that there is a substantial gap to address. Some 58% of consumers hold no protection products, while 59% of those who do not have protection have never considered it.
Those figures point to a problem that goes beyond whether suitable products are available. The industry also needs to consider when protection is discussed, how often it is revisited and whether customers have the support to understand how their circumstances have changed.
For many customers, the mortgage will be the starting point for that conversation. Buying a home is often one of the biggest financial commitments a person will make, so it makes sense for an adviser to consider what would happen if their circumstances changed. But the conversation should not end when the mortgage completes.
A customer who was single when they bought their first home may have started a family a few years later. Someone who was employed may have become self-employed. Their income may have changed, their mortgage may have increased, or they may have taken on new financial commitments.
None of these changes necessarily happen at the point a mortgage is arranged. If protection is treated as a one-off conversation, there is a risk that the customer’s cover stops reflecting their circumstances.
That is why the FCA’s focus on prompts at significant life events is important. Parenthood, becoming self-employed, changes to circumstances and other major financial decisions can all create legitimate reasons to revisit a customer’s protection needs.
The challenge for advisers is doing that consistently without turning every review into another sales exercise.
The answer is a relationship-led approach. Protection should become part of the wider conversation an adviser has with a customer over time, with review providing an opportunity to check whether their circumstances have changed and whether their existing arrangements still meet their needs. That also puts greater emphasis on the infrastructure behind the adviser.
Training can help advisers develop the confidence to have protection conversations consistently, including with customers who may not immediately see its relevance. Clear processes can help ensure those conversations are not dependent on individual advisers remembering to raise them. Technology can then support the practical side, from identifying appropriate review points to recording customer needs and decisions and creating timely follow-ups.
For some customers, the right outcome will not be a new policy. It may be that they already have suitable cover, need something different or require specialist advice. Advisers need to be able to recognise those situations and signpost customers appropriately rather than treating every conversation as an opportunity to sell.
The FCA has also identified challenges within the protection journey itself, including complex applications, underwriting, delays in obtaining medical evidence and difficulties accessing suitable products. These are issues the industry needs to address alongside the conversation about adviser engagement.
Technology has a role here too, but it should support the adviser rather than replace the judgement at the heart of the relationship.
The best use of technology is often the least glamorous. It can make sure a conversation happens at the right time, that important information is not lost and that an adviser can see the history of a customer’s needs and decisions before sitting down with them again.
For networks and firms, that means creating an environment in which advisers can build these relationships properly.
At Access FS, this is part of the thinking behind the continued development of the Access Academy and our Elev8 platform. The Academy provides a route for new advisers to develop their skills and confidence, while Elev8 can support advisers in identifying review points, recording customer needs and decisions and managing follow-up as relationships develop.
Neither replaces the adviser. They give the adviser more of the structure and information needed to do the job well. That distinction matters. The FCA is calling for more protection conversations, but simply increasing the number of conversations will not necessarily close the gap.
The real opportunity is to make those conversations more relevant, more timely and more connected to the customer’s life.
A mortgage might be where the relationship begins, but it should not be where the protection conversation ends. If the industry can move towards a model where advisers continue to understand their customers as their circumstances change, protection becomes less of a product discussion and more of a natural part of helping people maintain their financial resilience over the long term.
That is a better outcome for customers, and a better model for advisers too.
